28th Mar 2008 07:02
Lonrho PLC28 March 2008 28 March 2008 Lonrho Plc ("Lonrho" or the "Company") Lonrho Announces Year End Results Lonrho (AIM: LONR), the conglomerate with a structured portfolio of Africaninvestments, is pleased to announce its results for the year ended 30 September2007. At the Extraordinary General Meeting held on 24 February 2006, shareholders gavethe Board a new mandate to commence the rebuilding of Lonrho and there-establishment of a significant presence in the continent of Africa byinvesting in entities operating in a broad range of sectors. The current globalinterest in Africa and the opportunities that exist there continue to make thisa coherent and logical strategy. This strategy has, to date, resulted in Lonrhoinvesting in a port, shipping, aviation, water bottling plants, hotels,information technology businesses and natural resources. Financial Review The results for the year, as expected, reflect the fact that the businessesinvested in were either new start-up ventures or established businesses whichrequired resource in the form of cash and management. For the period to 30September 2007 the Company has: • Increased its turnover 229% to £11.2m (up from £3.4m in 2006). • Incurred a loss of £15.5m (2006: £0.2m). The Company remains in aninvestment and development phase. • Raised £16.46m through the issue of 51,449,381 ordinary shares of 1peach at a price of 32p per share in May 2007, raised £41.47m in placements sincethe year end to fund further acquisitions and expansion of existing businesses. • Increased its share price by 66%, up from 26.25p at the start of theperiod to 43.5p at the end of the period. Lonrho currently holds £18.2m cash at bank. Operational Highlights Lonrho's core business sectors - transportation, infrastructure, supportservices, hotels and natural resources - have continued to develop throughacquisition and the expansion of existing businesses within the Group. During the year to 30 September, the Company has achieved the following: Infrastructure Luba Freeport Limited ("Luba Freeport") (63% holding) • With Lonrho's investment, Luba Freeport has developed a new 70metre extension to the existing quay. This was completed on time and on budget,and became operational in November 2007. To meet demand, a further 83 metres iscurrently under construction, which is due for completion in mid-2008, givingthe port 350 metres of usable quayside frontage. Transportation: SA Independent Liner Services (Pty) Ltd ("SAILS")(66.7% holding) • In July 2007 Lonrho acquired an initial 45% of SAILS and assumed Boardcontrol. Since the year end, Lonrho has increased its holding to 66.7%. • In 2007, SAILS expanded its fleet from 2 to 6 ships in line withincreased demand for services with further expansion plans for the fleet in2008. Five Forty Aviation Limited ("Fly540")(49% holding) • Fly540 has grown to become the second largest carrier in Kenya, behindthe national airline and has commenced international flights to Sudan, Ugandaand Tanzania. • In October 2007, Fly540 agreed to establish its second regional hub inLuanda, Angola. This is now under development and will commence flights tofifteen domestic airports in mid-2008 with ten aircraft. Lonrho Air (BVI) Limited ("Lonrho Air")(100% holding) • Lonrho Air currently owns two ATR 42-320 aircraft, which are on leaseto Fly540, and has options to acquire 10 new ATR 72-500 aircraft which will be85% financed. Norse Air Limited ("Norse Air") • Because of a dispute with the management and the effect that this hadon the business, Lonrho has made the decision to fully provide against thecarrying value of its investment in Norse Air, effectively excluding it fromLonrho Group operations, as at 30 September 2007. Please refer to the ChiefExecutive's Review below for further details. Support Services Water Bottling • Since the acquisition of 100% of Swissta Holdings Limited in April2007, which owns a plant in Maputo, Mozambique, Swissta brand water has becomeone of the market leaders of bottled water in Maputo. • Lonrho Springs has been established to apply the business modelthroughout the continent with water bottling plants now under development inSouth Africa, the DRC and Angola. Sociedade Comercial Bytes & Pieces, Limitada ("Bytes & Pieces")(65% holding) • Lonrho acquired 65% of Bytes & Pieces based in Mozambique with plansto replicate the business model throughout Africa. The expansion outsideMozambique has begun under the name of Complete Enterprise Solutions (CES) andhas established an operational office and sales force in Johannesburg. Hotels Hotel Cardoso • The Hotel Cardoso, based in Mozambique, has seen a 22% increase inroom revenue over the past year and is currently undergoing a majorrefurbishment due to be completed during 2008. Further Hotel Opportunities • A hotel project is underway in Lubumbashi in the DRC, and furtheropportunities have been identified in Angola, Ivory Coast and Sudan. Natural Resources Lonrho Mining Limited ("Lonrho Mining")(21.64% holding) • Lonrho Mining has recently entered into a joint venture agreement withEndiama, the national diamond company of Angola and exclusive concessionary fordiamond mining rights, on the 3,000 square kilometres Lulo Diamond Concession ("Lulo"). • Lulo contains numerous identified kimberlite pipes and two rivers withextensive terrace gravels. The artisanal miner activity in these riversindicates that the gravels are diamond bearing. Zimbabwe LonZim Plc ("LonZim") - Post year end • LonZim was established as a separate company to invest in projects inZimbabwe and those related to the Zimbabwean economy. LonZim was listed on theLondon AIM stock exchange in December 2007 and raised £29 million. LonZim hassubsequently made a number of key acquisitions in the support services,telecommunications sectors and commercial property in the Beira Corridor inMozambique. • Lonrho Plc received a free carry interest of 20% of the current issuedshare capital of LonZim (current market value £7.5 million) and charges a fee of2 per cent of funds invested. David Lenigas, Executive Chairman of Lonrho commented: "The strength of Lonrho is founded on its name and long standing legacy acrossthe continent, where Lonrho as a brand is associated with project delivery anddevelopment. We continue to build on this strength by the recruitment of highlyskilled and motivated individuals, who have detailed knowledge and experience ofworking in Africa. "Lonrho has made a good start towards rebuilding an African wide conglomerate.From an initial single asset in Mozambique, the Company has developed itsinvestment strategy and continues to establish and improve its business models.The key building blocks have been soundly established and the Group now operatesin five core business sectors, operating across fourteen countries. " The full Report & Accounts are now available on the Company's websitewww.lonrho.com and are expected to be posted to shareholders by Monday 31stMarch 2008. Enquiries: Lonrho +44 (0) 20 7016 5105David Lenigas, Chief Executive +44 (0) 7881 825 378Emma de Borchgrave de Altena, Executive Director +44 (0) 7867 785 177 Pelham Public RelationsCharles Vivian +44 (0) 20 7743 6672 +44 (0) 7977 297 903James MacFarlane +44 (0) 20 7743 6375 +44 (0) 784 167 2831Collins Stewart Europe LimitedHugh Field +44 (0) 20 7523 8350Jonny Sloan CHAIRMANS STATEMENT David LenigasExecutive Chairman27 March 2008 The African market place is booming, with sub-Saharan Africa achieving over 7%growth in Gross Domestic Product in 2007. Africa is creating some of thestrongest individual economies in the World, driven by the extensive oil, gasand natural resources being developed. From a political focus, Africa often features in the World's news headlines forits problems. Unfortunately, crisis, unrest and scandal are always preferred bythe headline writers to political progress, economic growth, development andstability. However, as a Group directly engaged and doing business across thecontinent, we are seeing evidence of significant progress and thatsocio-political stability in Africa continues to improve. At the Extraordinary General Meeting held on 24 February 2006, shareholders gavethe Board the mandate to commence the rebuilding of Lonrho and there-establishment of a significant presence in the continent of Africa byinvesting in entities operating in a broad range of sectors. The current globalinterest in Africa and the opportunities that exist there continue to make thisa coherent and logical strategy. The strength of Lonrho is founded on its name and long standing legacy acrossthe continent, where Lonrho as a brand is associated with project delivery anddevelopment. We continue to build on this strength by the recruitment of highlyskilled and motivated individuals, who have detailed knowledge and experience ofworking in Africa. Lonrho invests in businesses that will enable and support the economies ofAfrica as they continue to grow. These range from the provision of safe traveland accommodation to infrastructure and transport supporting commerce, theimport and delivery of the raw materials and the export of finished products.Fundamentals essential to economic progress. As the Chief Executive Officer's Review of Operations illustrates, this strategyhas, to date, resulted in Lonrho investing in a port, shipping, aviation, waterbottling plants, hotels, information technology businesses and naturalresources. It is Lonrho's intention to develop strategic business units, and once tried andtested, roll-out each of its business units, as appropriate, across Africa. The results for the year, as expected, reflect the fact that the businessesinvested in were either new start-up ventures or established businesses whichrequired resource in the form of cash and management. During the year, the Group's turnover increased to £11.2 million (2006: £3.4million). However, the Group remains in an investment and development phase, andthus incurred a loss of £15.5 million (2006: £0.2 million). The Company's share price has shown considerable growth in the financial year,starting at 26.25p and finishing the year at 43.5p (+66%), demonstrating themarket's support for the development of a pan-African conglomerate. Lonrho invested a further £13.2 million during the year in Luba Freeport, whichhas funded the now completed 70 metre quay extension, warehousing, offices andhandling equipment. Luba Freeport is expecting to move into operating profit, inline with our projections, during the first quarter of 2008. Fly540, the Kenyan passenger airline, has, within twelve months of commencingoperations, become the second largest carrier in Kenya, moving into operatingprofit during the first quarter of 2008. Group turnover will significantly increase during 2008 with the roll-out of theGroup's operations and as each business comes on stream, losses will reduce. The management situation at Norse Air, which is more fully explained in theChief Executives' Review of Operations, resulted in us instigating legal actionagainst Norse Air and its non-Lonrho nominated Directors in December 2007. YourBoard felt that this approach was necessary to protect the Group's interests.This legal action is currently ongoing. As a result, a provision of £4.4million has been made to write off our investment in Norse Air, which hasadversely affected the results of the year. Lonrho has made a good start towards rebuilding an African wide conglomerate.From an initial single asset in Mozambique, the Company has developed itsinvestment strategy and continues to establish and improve its business models.The key building blocks have been soundly established and the Group now operatesin five core business sectors, operating across fourteen countries. I would like to take this opportunity to thank shareholders for their continuingsupport in the rebuilding of Lonrho (placements of new shares both during theyear and after the year end raised a net total of £57.93 million). I would alsolike to thank the Group's employees for all their hard work and endeavours inwhat are, sometimes, harsh environments and trying conditions. CHIEF EXECUTIVE'S REVIEW Geoffrey WhiteDirector and Chief Executive Officer27 March 2008 Over the past year Lonrho has grown and developed its business significantly andhas driven forward the growth strategy which had been approved by shareholdersin 2006, the continuation of which was approved by shareholders in 2007. Lonrho remains focused on business opportunities throughout Africa and aims toprovide the critical and core support and services necessary to enablebusinesses to operate, develop and grow. Lonrho's core business sectors - transportation, infrastructure, supportservices, hotels and natural resources - have continued to develop throughacquisition and the expansion of existing businesses within the Group. During the year the Board of Directors was strengthened by the appointment ofJean Ellis as Finance Director and, in October 2007, Ambassador Frances Cookjoined as a non-executive Director. Also in October, I was appointed a Directorand promoted to Chief Executive Officer, having been Chief Operating Officersince May 2007. This has taken the Board to four executive and two non-executiveDirectors, all of whom have extensive experience and knowledge of working inAfrica. Since the year end, development of the corporate management team included theappointment of a new business analyst to assist the business development managerwith the appraisal of new projects. A new financial analyst has also beenrecruited to increase the efficiency of reporting structures and to monitorbudgetary control and variances. In addition, operationally, a Country Manager was recruited for South Africa,based in Johannesburg. This role oversees the Group's Southern Africanoperations and provides essential management continuity. A further seniorexecutive has been employed as General Manager of Lonrho's expanding Port andShipping Division, bringing with him forty years of experience in the port andshipping industry across Africa. I am pleased to report that most of the acquisitions that Lonrho made in 2006and 2007 are developing into strong business units. They have defined our corebusiness sectors and have formed solid building blocks in each sector from whichLonrho can accelerate its growth. The results for the year end are as anticipated, save for the provisions thatwere required in respect of Norse Air. Most of the investments made during 2007were into start-up businesses or businesses which required resource in respectof cash and management. Lonrho's share of the loss after tax and minorityinterest was £15.5 million, which included a loss of £4.4 million in respect ofthe provision against the investment in Norse Air, as detailed below. In addition, there was a charge of £2.6 million in respect of share options andshare based payments to incentivise executives, employees and consultants.Whilst this is a charge to the Profit & Loss account, the net assets of theGroup are not affected, the credit being transferred as movements on reserves inthe Balance Sheet. During 2008, Lonrho will continue to make strategic investments across Africa,in order to achieve future growth in shareholder value. A review of operations follows. INFRASTRUCTURE Luba Freeport Limited ("Luba Freeport") (63% holding) Luba Freeport, a venture in conjunction with the Government of EquatorialGuinea, is operating well and is developing as the foremost deepwater port inthe Gulf of Guinea. Located on Bioko Island, it is strategically placed andservices the rapidly expanding oil and gas industry in the region. With Lonrho's investment, Luba Freeport has developed a new 70 metre extensionto the existing quay. This was completed on time and on budget, and becameoperational in November 2007. To meet demand, a further 83 metres is currentlyunder construction, which is due for completion in mid-2008, giving the port 350metres of usable quayside frontage. Since Lonrho's acquisition in May 2006, Luba Freeport has developed into one ofthe most efficient hubs for the offshore oil and gas industry in the Gulf ofGuinea. The port has attracted the leading oil producers and service companiessuch as ExxonMobil, Schlumberger, Baker Hughes, MI Fluids, Nalco, Marathon,Noble Energy and Amerada Hess. Further expansion of the facilities include the development of long stayapartments available to the companies operating from the port. With this further extension of the quay, it is envisaged that the port will alsobecome the main logistics centre for the region, with 20,000 square metres ofland allocated to meet demand for pipe storage and distribution. Luba Freeport is the only true, functioning, duty free zone in the Gulf ofGuinea, where suppliers can import and export goods and stocks without incurringduties. The offshore resources in the Gulf of Guinea continue to expand with on-goingexploration and new block allocations from the Government of Equatorial Guinea,Cameroon, Gabon and Sao Tome. The future demand for the port and its expansionplans directly reflect the forecast growth in the oil and gas industries in thisimportant region. The Gulf of Guinea currently supplies 10 - 12% of US oilimports and the US Government recently announced that it intends to increasethis to 25%. TRANSPORTATION SA Independent Liner Services (Pty) Ltd ("SAILS") (66.7% holding) Lonrho has spent some time evaluating the market for regular scheduled shippingservices between the African markets and the rest of the world. This sector wasseen as a fundamental core business for the Group. The shipping market in Africa demonstrates better than average margins inrelation to the worldwide shipping market. In July 2007, Lonrho acquired aninitial 45% of SAILS, a South African company providing containerised shippingservices. Lonrho is confident that, with the correct capacity and properresources, SAILS can develop into a significant shipping line. Since Lonrho's acquisition and the assumption of Board control, a further four,new, 1,100 TEU container vessels have been chartered for the fleet and 1,000 'reefer' refrigerated containers added to the company's resources. This enablesSAILS to access the higher margin markets for the transportation of chilledfresh produce from Africa to Europe, and medical supplies and other chilledcargoes from Europe to Africa. Since the year end Lonrho has increased its stake in the company from 45% to66.7% by supporting capital raisings by SAILS. The further funds have beenutilised for working capital, the expansion and deployment costs for the largerfleet and relocation to a larger office. The increased capacity at SAILS hasresulted in new contracts with a value of over US$14 million (£7 million). Within the coming six months the fleet will be fully committed at six vesselsand it is expected that further vessels will be chartered to expand SAILS'market share during 2008. Five Forty Aviation Limited ("Fly540") (49% holding) Fly540 meets a specific market requirement for aviation in Africa. Launched asa new airline in November 2006, Fly540 has grown to become the second largestcarrier in Kenya next to the national airline. Initially servicing the domesticmarket, the airline has grown steadily, carrying over 20,000 passengers in thepeak months. Having successfully established its domestic market, the airlinehas commenced its international scheduled roll-out from its Nairobi hub. It hasnow added flights to Sudan, Uganda and Tanzania. With the successful track record of Fly540 in Kenya the expansion of the Fly540concept to create a true pan-African airline is being implemented. In October 2007, Fly540 agreed to establish its second regional hub in Luanda,Angola. This is now under development and will commence flights to fifteendomestic airports in mid-2008 with ten aircraft. This followed the signing of anexclusive Memorandum of Understanding in June 2007 between Lonrho and one of thelargest internal investment companies in Angola to develop a new airline inAngola for the passenger, freight, leasing and charter markets. Further regional hubs in Central and West Africa are under negotiation andplanned for 2008/2009. As the key regional hubs become operational, initiallyservicing domestic destinations in each country and thereafter flying toadjacent countries, flights will be established to connect each regional hub.This will fulfil the strategy of becoming an African-wide airline. Norse Air Limited ("Norse Air") Lonrho's original investment in Norse Air was made in November 2006. Norse Airis a charter, leasing and maintenance company that operates from a base in SouthAfrica. Although we initially only acquired 43% of this company we believedthat, through the terms of the shareholder agreement, we had control and henceNorse was treated as a subsidiary of the Group and its results were fullyconsolidated for the period since acquisition in our interim results for the sixmonths ended 31 March 2007. Lonrho believed that it had increased itsshareholding in Norse to 51% on 5 September 2007. However this is disputed bythe other shareholders and is now subject to ongoing legal action. Unfortunately, we have also subsequently had a number of other serious issueswith management of Norse Air (who own the balance of the equity). It has beenargued by the management that Lonrho cannot exercise the control that we believewe had. As a result of this, our investment in Norse Air has now been classifiedas a participating interest in the consolidated accounts, for the whole of theperiod since the date of the original acquisition. Because of the serious loss of confidence in the management of Norse Air and theeffect that this has had on the business, we have made the decision to fullyprovide against the carrying value of our investment as at 30 September 2007.This has resulted in a loss of £4.4m in the year to September 2007. The Boardbelieves that this was the most prudent approach to take given the ongoinguncertainty of the outcomes of the various legal actions, including to gainaccess to the financial records of the Norse Air group of companies, that wehave been forced to take against the management of Norse Air. This legal actionis currently ongoing. The Board confirms that, other than the ongoing legal costs associated with theaction being taken against the management of Norse Air, there is no furtherexposure to Lonrho in relation to any liabilities of Norse Air. The Board has agreed that Lonrho will not inject any further funds into theNorse Air group of companies to settle any liabilities or losses that have, ormay have, been incurred. It is therefore with regret that, having been left withno alternative but to instigate legal action in December 2007 for fulldisclosure from the management, we have had to take the drastic step ofexcluding Norse Air from the Lonrho Group operations with effect from 30September 2007. The Board did not take this decision lightly. However, it was felt necessary inthe circumstances in order to protect Lonrho shareholders from any furtherexposure in respect of Norse Air. Lonrho Air (BVI) Limited ("Lonrho Air") (100% holding) As a further step to expand Lonrho's involvement in the aviation sector, LonrhoAir was established as a vehicle to acquire aircraft to on-lease to itssubsidiary operations. Lonrho Air currently owns two ATR 42-320 aircraft, whichare on lease to Fly540. Lonrho Air has options to acquire 10 new ATR 72-500aircraft, which it proposes to debt finance for 85% of the purchase price inconjunction with a COFACE & SACE government guarantee. The aircraft will bedeployed in the roll-out of Fly540. Lonrho Air's model is based on identifying good value aircraft that are soughtafter by operators across Africa. SUPPORT SERVICES Swissta Holdings Limited ("Swissta") (100% holding) Since the acquisition of 100% of Swissta in April 2007, which owns a plant inMaputo, Mozambique, Swissta brand water has become one of the market leaders ofbottled water in Maputo. Swissta also has a 21.4% stake in a plant in the Democratic Republic of Congoand recently agreed to invest further funding, pro rata with other shareholders,to double the plant capacity to meet increasing demand. Lonrho Springs was established in April 2007 to apply the Swissta model of waterbottling plants across Africa and will become the brand name for Lonrho'sbottled water subsidiaries, providing efficient, modular, international standardwater filtration and bottling plants. New bottling plants are under development in Angola, South Africa, andLubumbashi in the Democratic Republic of Congo. Each plant is scaled to meetdemand forecasts for the respective markets, and plants range from producing500,000 litres per month to 10 million litres per month. The roll out of theSwissta technology will continue across Africa and is forecast to reach eightcountries in the near future. Sociedade Comercial Bytes & Pieces, Limitada ("Bytes and Pieces") (65% holding) Bytes & Pieces is a successful computer hardware and software supplier andprogrammer. It is the market leader in Mozambique and provides turnkey networksolutions and maintenance support. In 2007 Lonrho purchased 65% of the companyon the understanding that the senior management would replicate the successfulMozambique business model across Africa. Bytes & Pieces is expanding outside Mozambique under the name of CompleteEnterprise Solutions ("CES"). CES, a venture in conjunction with themanagement, and has established operational offices and a sales force inJohannesburg. The company is a Dell Server master franchisee and alsodistributes Microsoft and HP products to the large corporate and Governmentmarkets. CES is attracting customers throughout Africa through its ability toprovide bespoke IT solutions and has commenced the tendering and bidding processon Government, corporate and banking contracts for 2008. HOTELS Hotel Cardoso SARL ("Hotel Cardoso") (59.04% holding) Hotel Cardoso exemplifies the business model for Lonrho Hotels. Utilisingquality management, in a growing business market, the hotel has seen a 22%increase in room revenue and a 9% increase in occupancy. The Hotel meets thedemands for business and local travellers to Mozambique. Hotel Cardoso is currently undergoing a US$1.5m (£0.75m) refurbishment, due tobe completed in late 2008. The first rooms to be modernised have been completed,and the outdoor poolside and garden area has also been renovated for guestsenjoying the view and sunsets over the bay from the Hotel. Plans are also inplace to redevelop the park adjacent to the Hotel, which will enhance the localarea. Lonrho has now secured a further hotel project in Lubumbashi in the DemocraticRepublic of Congo to service the demand created by the US$12 billion (£6billion) foreign direct investment being made there by natural resourcecompanies into copper and cobalt projects in the region. This will become theonly international standard hotel in the region. Projects have also been identified in Angola, Ivory Coast and Sudan where thereis a disparity between demand and supply of quality accommodation for businessand local visitors. NATURAL RESOURCES Lonrho Mining Limited ("Lonrho Mining") (21.64% holding) Lonrho Mining Limited (formerly Nare Diamonds Limited), is an Australian listedmining company. Lonrho Mining's main operation, the Schmidtsdrift Alluvial Mine near Kimberley,South Africa, owned 80% in conjunction with the local community, has produced13,372 carats of diamonds from 2,603,605 tonnes up to 30 September 2007 sincere-commencing trial mining operations in April 2006. Lonrho Mining has recently entered into a joint venture agreement with Endiama,the national diamond company of Angola and exclusive concessionary for diamondmining rights, on the 3,000 square kilometres Lulo Diamond Concession ("Lulo"). Lulo contains numerous identified kimberlite pipes and two rivers with extensiveterrace gravels. The artisanal miner activity in these rivers indicates that thegravels are diamond bearing. Lonrho Mining intends to seek dual listings on the AIM Stock Exchange andJohannesburg Securities Exchange in the near future. ZIMBABWE - Post Year End (not reflected in figures) LonZim Plc ("LonZim") (20% holding) Lonrho has a long history of being a large commercial participant in theZimbabwe economy, but had disposed of all of its business assets in the countryby 2000. However, the Board are acutely aware that Zimbabwe was once, and will be again,an economic centre for Southern Africa. In an effort to position Lonrho asstrongly as possible to benefit from an economic recovery, LonZim wasestablished as a separate company to invest in projects in Zimbabwe and thoserelated to the Zimbabwean economy. LonZim was listed on the London AIM stockexchange in December 2007 and raised £29 million. Lonrho has been appointed by LonZim to provide management support services onthe terms of a management services agreement. Lonrho, on behalf of itself and any of its subsidiaries or companies in whichLonrho has majority control of the board, has agreed not to make investments inZimbabwe or an area of Mozambique known as the Beira Corridor, during the periodof the Management Services Agreement. Lonrho has agreed to provide services toLonZim including sourcing investment opportunities and is providing management,accounting, human resources, financial, marketing, technical and other supportservices. Lonrho Plc received a free carry interest of 20% of the current issued sharecapital of LonZim (current market value £7.5 million) and charges a fee of 2 percent of funds invested. CORPORATE AND SOCIAL RESPONSIBILITY Lonrho aims to improve business in Africa and make a positive difference tolocal communities. Lonrho believes that its investments and acquisitions willencourage job creation as well as economic and political stability throughoutAfrica. Examples of some of the projects currently being undertaken: Luba Freeport sponsors a school serving Luba Town and the surrounding area. Thisis currently attended by over 100 children. Luba Freeport has established a twice weekly system of rubbish collection anddisposal for the residents of Luba Town. As a result of increasing requirements for English speaking workers for the oilindustry, a night-school has been set up and is sponsored by Luba Freeport. Thiscourse is available to Luba Freeport employees, local residents and clients ofLuba Freeport and has proven to be very popular. Hotel Cardoso is also aware of its role in supporting the local community andprovides a well equipped clinic for the use of its staff and their immediatefamilies. The clinic has a full time nurse and is visited twice daily by aqualified doctor. The Hotel supports Association Imagine, a British managed charity caring fororphaned children and single parent families mainly in the district of Katembe,adjacent to Maputo. In the last twelve months, donations to the charity haveincluded mosquito nets, linen and blanketing. Within the immediate locality of the Hotel, assistance to a local school will begiven. A project for repainting all the school buildings is scheduled tocommence in the near future. The Hotel has also undertaken the task of rehabilitating the adjacent localpark, renovating gardens and utility infrastructures as well as building newstructures. Fly540 continually strives to maintain high levels of awareness, amongstcustomers and industry travel partners, for Fly540's reduced impact on theenvironment through the deployment of modern, fuel efficient aircraft across itsentire network. The benefits of this strategy have been accelerated through therecently announced options to buy 10 highly efficient ATR 72-500 turbo propaircraft. Fly540 has supported the expansion of the Narok community library with adonation for the purchase of books and the extension of the reading room. Thelibrary is run by the Maasai Education Discovery organisation which was foundedin 1999 to promote education and community development. Consolidated profit and loss accountfor the year ended 30 September 2007 Continuing Acquisitions Total Total operations 2007 2007 2007 2006 £m £m £m £m TurnoverGroup 6.8 4.4 11.2 3.4Group net operating costs (18.0) (8.2) (26.2) (4.4) Operating loss (11.2) (3.8) (15.0) (1.0)Share of participating interest operating loss - (0.1) (0.1) -Write off of goodwill in respect of participatinginterest - (2.9) (2.9) - Total operating loss (11.2) (6.8) (18.0) (1.0)Profit on sale of fixed assets 0.1 0.4Interest payable (0.9) (0.2)Amount written off investment (0.5) -Interest receivable 0.5 0.7 Loss before taxation (18.8) (0.1)Taxation 0.6 - Loss after taxation (18.2) (0.1)Minority interests 2.7 (0.1) Loss for the year (15.5) (0.2) Loss per share (basic and diluted) (6.4)p (0.1)p Balance sheetsas at 30 September 2007 Group Company 2007 2006 2007 2006 £m £m £m £m Fixed assetsIntangible - goodwill 6.7 3.3 - -Tangible 36.9 19.8 - -Investments 5.0 - 31.5 31.5 48.6 23.1 31.5 31.5 Current assetsStocks 1.4 0.2 - -Debtors 6.2 2.3 8.0 -Investments - 7.1 - -Cash at bank 15.2 20.7 - - 22.8 30.3 8.0 -Creditors: amounts falling due within one year (26.1) (13.4) (8.4) (11.5) Net current (liabilities)/assets (3.3) 16.9 (0.4) (11.5) Total assets less current liabilities 45.3 40.0 31.1 20.0 Creditors: amounts falling due after one year (2.9) - - - Net assets 42.4 40.0 31.1 20.0 Capital and reservesCalled up share capital 2.8 2.2 2.8 2.2Share premium 33.2 17.4 33.2 17.4Revaluation reserve 1.5 1.6 - -Other reserve 2.2 0.1 2.2 0.1Profit and loss account 2.9 18.2 (7.1) 0.3 Shareholders' funds 42.6 39.5 31.1 20.0Minority interests (0.2) 0.5 - - 42.4 40.0 31.1 20.0 These financial statements were approved by the Board of Directors on 27 March2008 and signed on its behalf by: D Lenigas Consolidated cash flow statementfor the year ended 30 September 2007 2007 2006 £m £mNet cash flow from operating activities - continuing operations (2.9) (0.5) - acquisitions (4.5) 0.5 (7.4) -Returns on investments and servicing of financeInterest - received 0.5 0.7 - paid (1.2) - Net cash (outflow)/inflow for returns on investments and (0.7) 0.7servicing of finance Capital expenditure and financial investmentsPurchase of tangible fixed assets (18.6) (1.8)Sale/(purchase) of investments 1.8 (7.1)Net proceeds from sale of properties 0.1 0.4 Net cash outflow for capital expenditure and financialinvestment (16.7) (8.5) Acquisitions and disposalsNet cost of acquisition of subsidiaries (2.2) (1.7)Bank overdraft acquired with subsidiary (0.5) (0.1)Loan paid on acquisition of subsidiary - (6.1)Net proceeds/(costs) from closure/disposal of subsidiaries 1.0 (1.8)Net costs relating to acquisition of participating interest (4.4) - Net cash outflow from acquisitions and disposals (6.1) (9.7) Net cash outflow before financing (30.9) (17.5) FinancingIssue of ordinary share capital 15.8 18.0Funds received in advance for future share issue 8.0 -Debt due within one year: - new finance leases 0.2 - - loan repayments (0.3) (0.2)Debt due beyond one year: - new finance leases 1.1 - Net cash inflow from financing 24.8 17.8 (Decrease)/increase in cash in the period (6.1) 0.3 Statement of total recognised gains and lossesfor the year ended 30 September 2007 Group 2007 2006 £m £m Loss for the year (15.5) (0.2)Increase arising on revaluation of assets - 0.9Exchange adjustments to net investments in overseascompanies 0.1 (0.1) Total recognised (losses)/gains relating to the year (15.4) 0.6 Total recognised (losses)/gains since last annual (15.4) 0.6report Reconciliation of movements in shareholders' fundsfor the year ended 30 September 2007 Group 2007 2006 £m £m Recognised (losses)/gains relating to the year (15.4) 0.6Shares issued in year 16.4 18.0Credit in respect of share options 2.1 0.1Net increase in shareholders' funds in the year 3.1 18.7At beginning of year 39.5 20.8 At end of year 42.6 39.5 Note of historical cost profits and lossesfor the year ended 30 September 2007 Group 2007 2006 £m £m Reported loss before taxation (18.8) (0.1)Difference between historical cost depreciation 0.1 -charge and the actual depreciation charge calculatedon the revalued amountHistorical cost loss before taxation (18.7) (0.1) Historical cost loss after taxation and minority (15.4) (0.2)interests Annual General Meeting The Annual General Meeting will be held on Monday 28 April 2008 at 11.00am atPlaisterers' Hall, One London Wall, London EC2Y 5JU. Statutory Information The financial information set out above does not constitute the Company'sstatutory accounts for the period ended 30 September 2007 but is derived fromthose accounts. Statutory accounts for 2007 will be delivered to the registrarof companies following the Company's Annual General Meeting. The auditors havereported on those accounts. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Lonrho